Author Topic: Grad School or Start a Career?  (Read 4890 times)

cosmie

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Grad School or Start a Career?
« on: September 14, 2012, 12:51:42 PM »
Hey Mustachians, I need your help calculating this through.

I'm at a point where I need to start deciding between graduate school or finishing up and starting a career. Both options entice me, so I'm trying to figure out the financial picture between the two options.

Some information:

  • For the purposes of this analysis, my living expenses and take-home income are both roughly $24,000/yr. My school fees and books are covered seperately with financial aid.
  • Although it varies greatly depending on which type of role I try to break into, I can expect a minimum $45,000 starting salaries with my Bachelor's degree.
  • I have two options for grad school: an 18-month program to receive an MS, or a 24-month program to receive an MS and an MBA.
  • Either option, I'll be employed as a GTA, with an income of ~$13,000/yr. I'll also have to cover fees, books, and statistical software packages, so my expenses will increase by about $5,000/yr. That leaves a deficit of $16,000/yr I'd need to cover, most likely with student loans.
  • With the graduate degree, the lowest starting salary offered to a student was $65,000, so I'd like to use that as a baseline.

Doing a simple 6 year outlook:

Career, no grad school
Income: $45,000 * 6 yrs = $270,000

18-month MS
Debt accrued: $16,000 * 1.5 yrs = $24,000 (plus interest)
Income: $65,000 * 3.5 yrs = $292,500

24-month MS & MBA
Debt accrued: $16,000 * 2 yrs = $32,000 (plus interest)
Income: $75,000 * 4 yrs = $300,000 // $10,000 premium added to account for MBA degree

It seems that for the first 6 years, there isn't much benefit between either one (due to the student loans). However, after that point, the earning power of the advanced degree greatly outpaces the Bachelor's.

Although I'm not accounting for pay increases, it seems that the graduate school is a no brainer. From a Mustachian perspective, is there anything I'm overlooking? I was originally worried about the additional time in school putting me behind on FI, however the added earning potential seems to fully negate that.

Thanks for any insight. I keep having a feeling that I'm overlooking some aspect of this.
« Last Edit: September 14, 2012, 12:53:28 PM by cosmie »

Angelfishtitan

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Re: Grad School or Start a Career?
« Reply #1 on: September 14, 2012, 01:35:43 PM »
Is there any reason to not mate the two together? Depending upon what your current bachelor's is going to be in (I assume something technical with MS listed), it could be very likely that you could have grad school covered by your employer. Not only will this save you money in the long run, but can actually help steer you into what would be the best choice for your master's program. Depending upon your field, a MS may matter a lot, while a MBA adds little, or even detracts if you start looking for a starting position and they see you as overqualified. The decision on what to go towards can also depend on what you end up wanting to do, it helps to get a feel for what side of the company you want to get into at a technical firm. An MS would seem a natural choice, by you may find the project management side is what engages you more and an MBA would be better suited. This may seem obvious to you now, but don't be surprised when you finally start working where you actually end up and change your mind.

I think more background might help people judge, because what field you are in can dramatically change what would work best for most people.


sockmunkee

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Re: Grad School or Start a Career?
« Reply #2 on: September 14, 2012, 01:51:11 PM »
Is there any reason to not mate the two together?

Completely agree.  I was able to find employers who covered, all told, about 80-90% of my MBA and completed this while working.  This is the path I would recommend.  A good way to go would be to start your career working at a college/university (in a "real" job) but take advantage of free tuition there.  Then take your skills elsewhere when you are done.

Regarding which degree - I would look at the actual job postings for the jobs you would like to have in 4-5 years.  Do they say they want an MBA or MS?  Or either?  Looking at the job requisitions has helped guide my decisions on what certifications & degrees to shoot for.

RoseRelish

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Re: Grad School or Start a Career?
« Reply #3 on: September 14, 2012, 02:24:54 PM »
I went the MS route right after undergrad studies. I did similar math/estimates to what you're doing and it turned out for the best. I would have stood 0 chance of getting the job I got after my MS. Even though my initial pay was much, much less than I had been forecasting - I'm now above trend after 3 years. It depends on your field though, I suppose - and if you can get the job you want without the degree while having the employer pay part of it. My employer now pays nothing towards advanced degrees, a major change from a few years ago when they supposedly paid 100%.

cosmie

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Re: Grad School or Start a Career?
« Reply #4 on: September 14, 2012, 04:05:12 PM »
I think more background might help people judge, because what field you are in can dramatically change what would work best for most people.
Ah, that part didn't copy over. (I wrote this up elsewhere and pasted it over)

The degree I'm getting is a B.S.B.A. in Business Analytics, with a minor in Information Management. The degree is the result of a merger between the Statistics, the Operations, and the Management Sciences departments. For those engineers in the house (I know this place is full of them), it's akin to an industrial engineering degree from a business school.

A few of the internships I'm going for (and I feel the degree has prepared me for):
JPMorgan Business Systems Analyst
Deloitte Business Technology Analyst
Boeing Systems Analyst (or, with luck, Process Analyst)
GE ITLP Program

If I get a Master's, it would be from the same department I'm getting my undergraduate from. The undergraduate level is a glorified applied statistics degree, whereas the Master's level heavily integrated the operations aspects into it. The MBA I don't see as necessary, but there is an option to get both degrees simultaneously, and it only extends the entire program length an additional semester.

Going with this program, I'd be prepared for something like these out of the box:
Operations Intern
Product Intelligence Manager


Except for the fact that those require working experience (I have working experience, just not in a corporate capacity).

The main areas that graduates go for is business consulting (Deloitte, Accenture, E&Y, etc) and digital intelligence (dunnhumby, Target, etc - companies that mine your purchase history for goodies). In this aspect, the graduate degree just helps you jump ahead of the undergrads, but you end up along similar career paths.

Is there any reason to not mate the two together?

Completely agree.  I was able to find employers who covered, all told, about 80-90% of my MBA and completed this while working.  This is the path I would recommend.  A good way to go would be to start your career working at a college/university (in a "real" job) but take advantage of free tuition there.  Then take your skills elsewhere when you are done.
Yes, this is the other path I was considering. However, the MS is what I'd like, the MBA would just be a bonus. And it's only offered at a handful of schools, and proving it's worth (as opposed to an MBA) to a company would be difficult.

As for the starting my career at a university, that's another path I've considered. However, that would involve prolonging my schooling, while earning a fairly low pittance, and the break even point is closer to 8-10 yrs.

fidgiegirl

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Re: Grad School or Start a Career?
« Reply #5 on: September 14, 2012, 04:17:56 PM »
I think you've done the math pretty clearly here.  If you are confident of the salaries, I say go for the advanced degrees now.  However you haven't said the field and some people mislead themselves.  I don't get that sense with you, though.  Not sure why.

Looks like the advanced degree is going to pay out year after year after year . . . getting you to whatever your goals are all the faster.

Wendyimhome

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Re: Grad School or Start a Career?
« Reply #6 on: September 14, 2012, 08:17:36 PM »
I'll throw in a few ideas.

What is the hiring market like in your field, with and without the advanced degree?  If you are confident that you will find a position that puts the advanced degree to use, it probably makes sense to soldier on with the education.   If not, you might want to go with the bird in the hand.

Then again, staying in school could help you weather the economic downturn longer and, hopefully, find more opportunities when you are finished with the additional schooling.

Finally, don't ever underestimate the importance of minimizing student debt.  I know an awful lot of people who went to Law School to obtain a law degree in exchange for six figure debt.  Many of them cannot find jobs as lawyers.  Those that have found jobs are sadly wed to them because they have to pay off those loans.  I can't imagine anything financially worse than knowing you have the equivalent of a mortgage hanging over you, but with no home to show for it.

cosmie

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Re: Grad School or Start a Career?
« Reply #7 on: September 14, 2012, 09:22:15 PM »
However you haven't said the field and some people mislead themselves.
I haven't said a specific field because there isn't a specific field. The degree, at both the undergrad and graduate level, teaches data analysis and synthesis. The graduate level simply goes into more advanced techniques.


It can be applied to virtually any data-heavy field. Some graduates that I know personally have gone into:
Business Consulting (Deloitte, Ernst and Young, Accenture, McKinsey)
Consumer Research (Hanes, Kroger, dunnhumby, Amazon)
Intelligence Analyst (FBI, NSA)
Supply Chain Analyst (Caterpillar Logistics, Ernst  & Young)
Operations Analyst (dunno which company)
Financial Analyst (Capital One, various banks)
Forecast and Modeling Analyst (Capital One, Chase Bank)

Basically, if it's an Analyst, research, or consulting gig, it fits (no matter the domain).

Those are from the graduate program. I'm in the first graduating class of the undergraduate program, so I don't have any benchmarks for prospects. I know I have shots at internships with many of these companies, as they're all quite interested in the possibilities of undergraduates (they're cheaper, so can they do the same work?). But long term job prospects with either are uncertain, just because the degree programs themselves are new, and the term "Business Analytics" or "Business Analyst" seems to have a different internal meaning for any company that uses it, so getting a degree in "Business Analytics" doesn't necessarily qualify me for a job posting of the same title.

What is the hiring market like in your field, with and without the advanced degree?  If you are confident that you will find a position that puts the advanced degree to use, it probably makes sense to soldier on with the education.   If not, you might want to go with the bird in the hand.
The hiring market is great.

  • How does Google rank webpages?
  • How does Netflix recommend movies?
  • How does Amazon know which items to suggest together to facilitate impulse purchases?
  • How can Amazon so easily offer 2-day shipping for only $80/yr (along with the other Prime perks), when most companies charge outrageously for 5-7 day delivery?
  • How does Facebook know which "Friends" to recommend you?
  • How does Capital One know whether to approve you or not, and for how much?
  • Why do so many companies use Loyalty cards now?

All of these questions relate to statistical modeling. And that's about 60% of what the degree focuses on. Businesses are collecting monumental amounts of information, and they want to get something back out of it. Especially Target. I will never shop there again after learning about exactly what they do. They collect more detailed information on customers than Uncle Sam, or even LexusNexus.

The degree has massive potential, particularly in areas of logistics and marketing, as marketers try to get their fangs in you as lightly as a butterfly and supply chain managers try to streamline as much as possible.

Going into it at the undergraduate level, I'm likely to begin by doing a bunch of grunt work and slowly moving up. Going in with an advanced degree, I'm likely to skip the lowest few rungs and start a bit higher up, but in the same progression.

Quote
Finally, don't ever underestimate the importance of minimizing student debt.  I know an awful lot of people who went to Law School to obtain a law degree in exchange for six figure debt.  Many of them cannot find jobs as lawyers.  Those that have found jobs are sadly wed to them because they have to pay off those loans.  I can't imagine anything financially worse than knowing you have the equivalent of a mortgage hanging over you, but with no home to show for it.
Trust me, this is why I wanted to mull my thoughts here at MMM. I've gone through undergrad debt free, and am particularly proud of that fact. However, it's not possible if I continue for grad school, and I'll have to succumb to the evils of student loans (at an amount that's less than average, but still significant). The people I've talked to look at me like I'm crazy when I factor in student loans into my grad school decision, as they just see them as a fact-of-life kind of thing, and that I shouldn't worry about them. Hell, that mentality is so ingrained in the US that student loan debt doesn't even get figured into debt load when applying for a mortgage, unless it's within 2 years of coming due.
« Last Edit: September 14, 2012, 09:25:39 PM by cosmie »

Angelfishtitan

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Re: Grad School or Start a Career?
« Reply #8 on: September 17, 2012, 09:38:47 AM »
Looking over the latest posts by you and your description of your field, I would probably recommend graduate school, at least the MS. Since, as you stated, your field is somewhat new, you will have to try and feel out potential jobs and see what the field loks like as to if a MBA is actually worth the time/money. Your $10k/year premium may not be realistic. The again, it may put you right into managaing your own small team, which could boost your earnings, especially if the large majority of people in your field do not even have an MS.

Another benefit you have to staying in school is two more summer's worth of internships to network, which in a growing field is probably going to be your biggest asset come finding a job after school. You are doing a decent job lowering your debt coming out, an internship will help with some of the cost just from earnings, and you may find the company you intern at (especially if it is a larger one or you have already been offered a job before your final semester) will be willing to cover your software packages and books, helping lower your debt even more. It may seem like a large number on paper, but it is amazing how fast it will be gone with good savings habits.


jrhampt

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Re: Grad School or Start a Career?
« Reply #9 on: September 17, 2012, 10:41:34 AM »
I have an informatics/analytics position at an insurance company, currently finishing up an MA in Statistics with a certificate in Data Mining, and my company is reimbursing me for nearly all my education costs (I think I'll end up paying less than $2k out of pocket including books and fees).  The job market is indeed excellent for these positions.  It isn't fun going to grad school and working full time, but it's doable, and I don't have to worry about student loans.  You'll do just fine either way, but I'd lean toward getting a job first and having the employer finance grad school.